On BitGo, users’ funds are already insured up to $100 million. It is amongst the few companies in the crypto world that offer insurance to users. This cover applies to crypto-assets held in cold wallets. Recently, the company announced that it had obtained a policy for excess insurance via a global marketplace for the insurance sector.
Additional Crypto Insurance
According to BitGo, customers who use their services already enjoy insurance cover of up to $100 million for their crypto assets. The company has now expanded this cover to offer users an extra layer of protection. BitGo will now be the 1st digital asset custodian to give customers the opportunity to purchase their own "dedicated excess limits above BitGo's $100 million policy."
Canopius Specie Consortium is leading the program, which is a group of Lloyds of London and several other insurance firms in Europe. Lloyds is already quite active in the crypto-insurance sector. It offers insurance cover to various crypto firms. This cover protects the company’s crypto assets from hacks, theft by employees, loss of private keys, and other things that may lead to the loss of crypto assets.
The options for insurance cover in the crypto sector are scarce. However, various firms in the insurance world are slowly warming up to the industry. Currently, several insurance firms offer cold storage insurance cover to crypto firms.
Cryptocurrencies are quite attractive to nefarious actors. This is because they are usually of high value and once a hacker has the crypto, it is very difficult to track them. Unlike the banking system, there is little opportunity to tell where the funds went, which has emboldened criminals to target the crypto sector. Besides that, while the blockchain is difficult to hack, the centralized points where crypto is stored are prone to the flaws that affect mobile apps and centralized systems. Since most crypto firms do not have the resources to set up complex security measures, they have become easy prey for hackers.
Crypto.com Jumps Aboard
BitGo revealed that they already have someone using their new service. They state that Crypto.com has already signed up for the service. According to the CEO of Crypto.com, BitGo’s insurance program was already quite robust. However, they had decided to purchase excess insurance as a way to reassure their customers that their funds were safe.
BitGo and the Crypto Sector
When BitGo was launched in 2013, it was a Bitcoin wallet service. However, it later branched out to support other crypto assets such as Ripple, LTC, ETH, BCH, and Bitcoin Gold. In April 2018, the service added support for ERC20 coins. Today, it supports close to 80 crypto coins.
One of its main selling points is its multi-sig wallet technology. The technology has proven attractive to institutional investors due to the enterprise-grade custody solution offered. Before a transaction I executed, there needs to be two or more signatures that confirm it. This extra security layer eliminates the risk of fraudulent transactions.
Can Only Be Good For The Industry
The addition of extra insurance will likely prove attractive to even more institutional investors. Firms that were worried the $100 million coverage was too low can now raise the limit to a level to which they are comfortable. It is a small but important step towards the integration of crypto with the financial world.
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